Bitter Rift: Oculus has to pay $500 million to ZeniMax over VR headset, rules court

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A US court has ruled that Oculus must pay $500 million to software developers ZeniMax over the VR headset they’ve developed. The jury ruled that Palmer Luckey, who co-founded Oculus, failed to abide by a non-disclosure agreement he had signed while working with ZeniMax and id Software. However, the jury also found that neither Oculus nor its founders stole trade secrets. This is all part of a very messy saga that’s been thundering on since 2014 and has seen appearances in court not only of Luckey but also John Carmack and Mark Zuckerberg.

The basic background is this: the big boys at ZeniMax say that Palmer Luckey’s collaboration with id resulted in a working prototype and code that was not his to take, and he subsequently worked on it with ex-employees who came to work with him. They allege that John Carmack at id downloaded a bunch of documents and data that would have been necessary to create the Rift VR headset, that Luckey only supplied a rudimentary prototype which was more fully developed by ZeniMax employees including Carmack, and that Luckey “lacked the training, expertise, resources or know-how to create commercially viable VR technology”.

Of course, after Luckey set up Oculus, it was soon bought up by Facebook, complicating matters further and bringing to bear even more lawyers and mumbo jumbo men.

The basic accusation has remained however, that the Rift is actually the work of ZeniMax employees. Their lawyers argued in court that the whole thing was a “heist” and that they ought to be paid $4 billion in total for the debacle, report Polygon. Meanwhile Oculus’ lawyers said that the lawsuit was motivated by “embarrassment” and “jealousy”.

The jury didn’t award the Zen crowd that huge sum, but a different huge sum. Oculus as a company must pay $200 million for breaking an NDA, $50 million for copyright infringement and $50 million for false designation. I won’t pretend to understand exactly what that means but I will tell you that Luckey has to pay a further $50 million himself for the same thing, and former Oculus CEO Brendan Iribe has been likewise ordered to pay $150 million for false designation. That makes up the total order of $500 million. A bit of a whopper, really.

Oculus weren’t deterred, spinning the order into a victory – because the charge of misappropriating trade secrets did not stick.

“The heart of this case was about whether Oculus stole ZeniMax’s trade secrets, and the jury found decisively in our favor,” they said in a statement to Polygon. “We’re obviously disappointed by a few other aspects of today’s verdict, but we are undeterred. Oculus products are built with Oculus technology.”

ZeniMax, meanwhile are appreciative.

“Technology is the foundation of our business and we consider the theft of our intellectual property to be a serious matter,” said Robert Altman, ZeniMax’s Chairman and CEO, in a statement. “We appreciate the jury’s finding against the defendants, and the award of half a billion dollars in damages for those serious violations.”

Oculus have also said that they plan to appeal the jury’s decision. So this legal mess might not be in a state for a good clean-up just yet.

They did win that though. This verdict essentially says Zenimax had nothing to do with the making of the Rift.

Zenimax just gets some cash from Oculus for using their game names inappropriately (like specifying Doom 3 BFG as a reward in the original Kickstarter), as well as for Carmack nabbing some documents and Rage code and Palmer breaking his NDA.

Not correct. The jury agreed that Zenimax were heavily responsible for creating the Rift, that’s what the False Designation of Origin claim was for. Using Doom3 was the separate copy right infringement payment.

The jury agreed with Zenimax that they were at least jointly responsible for the creation of the Occulus Rift.

The jury also agreed that Occulus signed an agreement not to disclose the specifications or technology behind the Rift.

The only thing that the Jury didn’t agree on was the IP infringement and Carmack’s responsibility. This boils down to legal technicalities. Apart from the NDA the only contract was between Zenimax and Carmack in that any work Carmack did for Occulus whilst a Zenimax employee belonged to Zenimax.

In most states that type of contract law is not enforceable. Also as Zenimax didn’t agree to a contract before supplying Occulus with the tech its not IP theft.

The jury were shown emails from both Occulus and Zenimax that showed Occulus’s Rift prototype was basic and that Occulus couldn’t get it to do what they wanted it to do.

Then there’s the emails and tweets from both parties which show Zenimax supplying Occulus with the tech and staff to get it to work. Carmack even tweeted how he was repurposing the code he wrote whilst in Zenimax to be used by Occulus.

Then there’s the NDA where Zenimax told Occulus they couldn’t publish Zenimax’s tech and listed the tech being used in the Rift.

Zenimax hadn’t charged Occulus a penny for this.

Oculus then started the Kickstarter where they took full credit for building the Rift (the emails showed they were still asking Zenimsx for help) and published the NDA tech as part of the SDK for the Rift.

Zenimax approached Occulus about buying equity. Occulus’s response was over $1m for 3%. Zenimax went for more 15% because of their contribution. Oculus refused so Zeninax asked Carmack to stop helping. Carmack’s response? Before not renewing his contract to copy as much of Zeninax’s documentation as possible and take it to Occulus.

Regardless of what Zenimax had done in the past they helped out a start up and that start up tried to fuck them over.

Carmack helped Oculus, not Zenimax, just he happened to be employed by Zenimax due to the recent takeover. By this time, Carmack was barely doing anything at id anymore, and helping Oculus was just a side project.

You can’t seriously suggest that Zenimax lost anything by any of this.

Why are people so dumb! We have our own VR! its called our eyes & the life around us!
You have got to be insane to of fallen for this gimmick! which locks you inside the most stupid thing ever invented! A major plus for all you mugs who own one!…YEP YOU LOOK LIKE A PLONKER! LOL

“Carmack intentionally destroyed data on his computer after he got notice of this litigation and right after he researched on Google how to wipe a hard drive,” the statement says. “And data on other Oculus computers and USB storage devices were similarly deleted (as determined by a court-appointed, independent expert in computer forensics).”